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Bitcoin Bad For Retirement; Student Loan Payment Pause

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Bitcoin has taken a beating these past few months—losing nearly half of its value after surpassing $60,000 in mid-April—but it’s back on the mend. As the price hovers around the $40,000 mark, some wary investors have leapt back onto the crypto train. Talking heads are pondering the value of bitcoin as an inflation hedge, or even as a component of your retirement account…though the tax implications require a close eye.
Retirement’s Risk Appetite
Crypto exchange Coinbase has unveiled a new partnership that allows some customers to invest up to 5% of their retirement funds in over 50 cryptocurrencies, including bitcoin. Sound risky? AARP’s senior policy expert thinks so, warning that crypto is “definitely not appropriate for retirement investing.“ Biden’s budget plan includes another worry for some rich soon-to-be retirees: A proposed increase in the top capital gains tax that would be implemented retroactively. (It looks legal, but whether Congress actually passes it is another question.) Contributor Richard McGahey points out that the pandemic has also magnified economic pressures on vulnerable older workers who can’t afford to retire, and suggests adding an “Older Workers’ Bureau” to the Department of Labor as one possible solution.
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Jun 18, 2021,
09:00am EDT
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Bitcoin Bad For Retirement; Student Loan Payment Pause

Eliza Haverstock
Forbes Staff
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I’m an assistant editor covering money and markets.

Sound Money
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Bitcoin Cryptocurrency Value Goes Down : Illustration
Adding bitcoin to your 401(k)? It’s an option.[+]GETTY IMAGES

Bitcoin has taken a beating these past few months—losing nearly half of its value after surpassing $60,000 in mid-April—but it’s back on the mend. As the price hovers around the $40,000 mark, some wary investors have leapt back onto the crypto train. Talking heads are pondering the value of bitcoin as an inflation hedge, or even as a component of your retirement account…though the tax implications require a close eye.


Read on for Forbes’ take on the latest personal finance news, spanning from crypto crashes to lumber prices to child tax credits (and more).

Retirement’s Risk Appetite
Crypto exchange Coinbase has unveiled a new partnership that allows some customers to invest up to 5% of their retirement funds in over 50 cryptocurrencies, including bitcoin. Sound risky? AARP’s senior policy expert thinks so, warning that crypto is “definitely not appropriate for retirement investing.“ Biden’s budget plan includes another worry for some rich soon-to-be retirees: A proposed increase in the top capital gains tax that would be implemented retroactively. (It looks legal, but whether Congress actually passes it is another question.) Contributor Richard McGahey points out that the pandemic has also magnified economic pressures on vulnerable older workers who can’t afford to retire, and suggests adding an “Older Workers’ Bureau” to the Department of Labor as one possible solution.


Credits For Kids
Parents, listen up: The IRS just released a new FAQ about the newly (and temporarily) expanded Child Tax Credit, plus an online tool to reach eligible parents who don’t normally file tax returns. (Parents can receive a $3,000 credit for every child ages 6 through 17 and $3,600 for every child under age 6; Half of the credit can be paid through monthly cash advances starting July 15.) Thinking of getting into cryptocurrency? Contributor Guinevere Moore explains how to avoid 10 common tax mistakes made when reporting (or not reporting) cryptocurrency transactions to the IRS.

Bitcoin-Loving Billionaires
The price of bitcoin resembles a dizzying theme park ride, but hedge fund billionaire Paul Tudor Jones says the cryptocurrency is a “reliable” inflation hedge and “a way to invest in certainty.” Sports betting presents another highly risky investment opportunity, but the founders of DraftKings see a path to profitability if more states legalize their business. Just don’t buy Iron Titanium—the Mark Cuban-backed cryptocurrency crashed to zero on Tuesday, signaling volatility to come for competing tokens.

Lumbering Back Down
The much-discussed soaring price of lumber has fallen more than 40% since its peak in May, indicating that the economy—well, commodities, at least—might be returning to status quo. Nonetheless, rising prices across the board continue to ring alarm bells for inflation doomsters. To their chagrin, the Fed just indicated it won’t raise interest rates until late 2023— here are some possible reasons for the wait. Though 26 states (and counting) have already announced plans to nix the $300 federal unemployment supplement, Goldman Sachs predicts that the labor squeeze will continue for the most part until the benefits expire in every state come early September.

Forbearance Bears
The current moratorium on student loan payments is set to expire on September 30. There’s a glimmer of hope that the date will be extended, but borrowers should still prepare to start paying up again in October. Vaccinated and itching to get back into the world? Sorry to say you’re not alone—nearly nine out of 10 Americans plan to travel in the next six months, and Forbes Advisor shares tips to prepare for a vacation and hopefully outsmart the masses.

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